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Post by Deleted on Oct 22, 2012 17:38:11 GMT -8
I suspect it's going to be a very turbulent ride all week Not at all. Last week's whipsaw action was the institutions positioning themselves with more shares going into calendar 2013. They accomplished this by starting a sell off at $705 (Sept 21 an important date), with an average sell price of ~$670/$675 before reversing strategy. Average Daily Volume from July Earnings to Sept 21 14.5 million. Average Daily Volume from Sept 21 to date 19.5 million. This caused a lot of margin calls and triggered even more Stop Losses, having the effect of continuing a sell off, and freeing up more shares. It only takes a little bit above daily average to cause a buyer/seller imbalance. A little more supply causes a drop in price. Once started it doesn't take much to keep the momentum going until capitulation occurs. When AAPL tickled $620, a nudge by the institutions caused retail investor capitulation to $609. That set the stage for those very same institutions to load up on AAPL, causing it to go up $25 today. Sold at average of $675, with a buy back at average of $625. Institutional ownership generally is at the 70% level. Currently it is at 68%. That 2% of collective ownership amounts to about 20,000,000 shares. Sell 20,000,000 shares at $675. Buy back 21,600,000 shares at $625. The institutions pick up a free 1,600,000 shares prior to AAPL going to $1,000, yielding a profit of $1.6 Billion without changing their long term positions, not to mention profits from the judicious purchases of Puts. Today's Put/Call ratio dropped to 0.72:1 from a high of 0.98:1 established on Sept 21, the same day that AAPL peaked at $705.They are doing this because of 2013 expectations of iPhone and iPad market share expansion, and increased profitability of Apple.
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JDSoCal
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Post by JDSoCal on Oct 22, 2012 17:55:00 GMT -8
Quite frankly - it really is an easy fix - just have a few different models and make the least expensive one $299. Although let's be honest - if it was $349 would you seriously not buy it? Yes, lost in all the babble about pricing is that Apple never has just once model at one price. There will be the cheapo, edu-centric (no cellular) and e-reader designs, and the higher bells-and-whistles models. Let's just remember that the same pack of geniuses were slamming Apple a while back for not joining the race to the bottom with NetBooks. "We don't know how to make a $500 computer that's not a piece of junk." - SJ
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Post by mbeauch on Oct 22, 2012 18:12:41 GMT -8
$299 makes the most sense for an entry model. Going below the touch does not make sense. We will know soon enough. Looked at the AH action, Hmmmm interesting.
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Mav
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Post by Mav on Oct 22, 2012 18:17:02 GMT -8
The idea that Apple could make a $629-$659 64GB iPad mini with LTE brings a smile to my face.
iOS price points from $0-$849. That overpriced Mac meme is so last millenium. Welcome to Apple's post-PC world.
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Post by mbeauch on Oct 22, 2012 18:34:41 GMT -8
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Deleted
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Post by Deleted on Oct 22, 2012 18:38:30 GMT -8
Not at all. Last week's whipsaw action was the institutions positioning themselves with more shares going into calendar 2013. They accomplished this by starting a sell off at $705 (Sept 21 an important date), with an average sell price of ~$670/$675 before reversing strategy. Average Daily Volume from July Earnings to Sept 21 14.5 million. Average Daily Volume from Sept 21 to date 19.5 million. This caused a lot of margin calls and triggered even more Stop Losses, having the effect of continuing a sell off, and freeing up more shares. It only takes a little bit above daily average to cause a buyer/seller imbalance. A little more supply causes a drop in price. Once started it doesn't take much to keep the momentum going until capitulation occurs. When AAPL tickled $620, a nudge by the institutions caused retail investor capitulation to $609. That set the stage for those very same institutions to load up on AAPL, causing it to go up $25 today. Sold at average of $675, with a buy back at average of $625. Institutional ownership generally is at the 70% level. Currently it is at 68%. That 2% of collective ownership amounts to about 20,000,000 shares. Sell 20,000,000 shares at $675. Buy back 21,600,000 shares at $625. The institutions pick up a free 1,600,000 shares prior to AAPL going to $1,000, yielding a profit of $1.6 Billion without changing their long term positions, not to mention profits from the judicious purchases of Puts. Today's Put/Call ratio dropped to 0.72:1 from a high of 0.98:1 established on Sept 21, the same day that AAPL peaked at $705.They are doing this because of 2013 expectations of iPhone and iPad market share expansion, and increased profitability of Apple. Following up on the above, OI for the January 2014 $800 Call jumped from 9800 on Sept 21 to 14,000 last Friday. That's 40+% in 22 days during a $96 sell off. It took 85 days to go up 40+% before then, during a $130 rally, during which time you could have bought them for about $16 less (on average). THE BIG BOYS ARE BUYING THE FUTURE
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Post by BillH on Oct 22, 2012 18:45:46 GMT -8
Even though I know what will come next, I have to say I missed the fun this afternoon. Had a room to paint and I thought today was just an oversold bounce, so I did not even look at the market. Needless to say, me happy. I had a similar day to Mark. It's Fantasy Fest week here in Key West and I saw a rather attractive brunette being painted. ;D
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Post by greedynoob on Oct 22, 2012 18:47:39 GMT -8
Yep, I didn't have time to get all the firewood into the shed yet. This is only a minor storm and should melt away by the weekend, and then I'll try to get a few more cords put away properly. Where are you? (I'm northwest of Denver, at 8,850')
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Post by Tetrachloride on Oct 22, 2012 18:59:21 GMT -8
Futures are plain, but AAPL is 636.75 in after hours.
Nikkei has reached 9000. HangSeng is steady over 21,000.
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Post by rickag on Oct 22, 2012 19:19:59 GMT -8
I suspect it's going to be a very turbulent ride all week Not at all. Last week's whipsaw action was the institutions positioning themselves with more shares going into calendar 2013. They accomplished this by starting a sell off at $705 (Sept 21 an important date), with an average sell price of ~$670/$675 before reversing strategy. Average Daily Volume from July Earnings to Sept 21 14.5 million. Average Daily Volume from Sept 21 to date 19.5 million. This caused a lot of margin calls and triggered even more Stop Losses, having the effect of continuing a sell off, and freeing up more shares. It only takes a little bit above daily average to cause a buyer/seller imbalance. A little more supply causes a drop in price. Once started it doesn't take much to keep the momentum going until capitulation occurs. When AAPL tickled $620, a nudge by the institutions caused retail investor capitulation to $609. That set the stage for those very same institutions to load up on AAPL, causing it to go up $25 today. Sold at average of $675, with a buy back at average of $625. Institutional ownership generally is at the 70% level. Currently it is at 68%. That 2% of collective ownership amounts to about 20,000,000 shares. Sell 20,000,000 shares at $675. Buy back 21,600,000 shares at $625. The institutions pick up a free 1,600,000 shares prior to AAPL going to $1,000, yielding a profit of $1.6 Billion without changing their long term positions, not to mention profits from the judicious purchases of Puts. Today's Put/Call ratio dropped to 0.72:1 from a high of 0.98:1 established on Sept 21, the same day that AAPL peaked at $705.They are doing this because of 2013 expectations of iPhone and iPad market share expansion, and increased profitability of Apple. Thank you for your research, it is both comforting and maddening at the same time. Comforting in that institutional sentiment is long term bullish, maddening that AAPL may be manipulated so easily(relatively speaking).
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Mav
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Post by Mav on Oct 22, 2012 19:26:31 GMT -8
Gregg, whatcha mean by "big boys"? I imagine institutions are limited to the amount of options they can buy - though I can also see them _selling_ a bunch as being part of the market maker/EO brigade.
We talking more hedge fund types, or big fish investors/traders?
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Mav
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Post by Mav on Oct 22, 2012 19:27:35 GMT -8
"We don't know how to make a $500 computer that's not a piece of junk." - SJ Until the iPad. And the iPad mini tomorrow.
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mark
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Post by mark on Oct 22, 2012 20:00:33 GMT -8
Holy carp ... a huge slug of Jan '14 800 calls and Jan '14 1000 calls just traded today! Looks like an 800-1000 vertical spread that cost about $30.85 each, and what looks like a total of almost $10 MILLION for the entire trade. Wow, that's a big bet!!! I went for the Jan 14 750's, straight up, after dumping my margined stock. I spent some time Sunday working up my determination to make the move. I figure that we are in for a big rise in the next half year and I could wait it out and take the suffering if we visited 580. I pulled the trigger around 627 when it seemed the reversal had legs. The volatility drop will kill me after earnings but I think we could get a big move up soon. I will create a spread when we get to $750, if that happens. What kind of spread are you thinking of creating with the 750's? I have some 450-500 Jan '13 spreads that I will hopefully sell this year (49.75 is good enough for me). And I have some 600-650 Jan '14 spreads as well.
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mark
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Post by mark on Oct 22, 2012 20:09:37 GMT -8
When AAPL tickled $620, a nudge by the institutions caused retail investor capitulation to $609. I thought for sure they would get it to crack $600 by a little bit. I would have bought even more at that price. I've only just begun my purchases of the Jan '15's!
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Post by Luckychoices on Oct 22, 2012 20:15:00 GMT -8
I suspect it's going to be a very turbulent ride all week Not at all. Last week's whipsaw action was the institutions positioning themselves with more shares going into calendar 2013. They accomplished this by starting a sell off at $705 (Sept 21 an important date), with an average sell price of ~$670/$675 before reversing strategy. Average Daily Volume from July Earnings to Sept 21 14.5 million. Average Daily Volume from Sept 21 to date 19.5 million. This caused a lot of margin calls and triggered even more Stop Losses, having the effect of continuing a sell off, and freeing up more shares. It only takes a little bit above daily average to cause a buyer/seller imbalance. A little more supply causes a drop in price. Once started it doesn't take much to keep the momentum going until capitulation occurs. When AAPL tickled $620, a nudge by the institutions caused retail investor capitulation to $609. That set the stage for those very same institutions to load up on AAPL, causing it to go up $25 today. Sold at average of $675, with a buy back at average of $625. Institutional ownership generally is at the 70% level. Currently it is at 68%. That 2% of collective ownership amounts to about 20,000,000 shares. Sell 20,000,000 shares at $675. Buy back 21,600,000 shares at $625. The institutions pick up a free 1,600,000 shares prior to AAPL going to $1,000, yielding a profit of $1.6 Billion without changing their long term positions, not to mention profits from the judicious purchases of Puts. Today's Put/Call ratio dropped to 0.72:1 from a high of 0.98:1 established on Sept 21, the same day that AAPL peaked at $705.They are doing this because of 2013 expectations of iPhone and iPad market share expansion, and increased profitability of Apple. Very nice summary, insight and comment, Gregg.
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Post by adamthompson32 on Oct 22, 2012 20:21:53 GMT -8
"We don't know how to make a $500 computer that's not a piece of junk." - SJ Until the iPad. And the iPad mini tomorrow. And the iPhone. And the iPod touch.
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Mav
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Post by Mav on Oct 22, 2012 20:30:22 GMT -8
iPhone ASP - safely over $600. iPod touch - pocket computer, but not a huge volume seller for Apple though an incredibly strategic gateway/iOS hardware/software development platform But yes, I did think about including iPod touch at least.
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Post by lovemyipad on Oct 22, 2012 20:39:16 GMT -8
626.54 is the 100 day ending Friday. 100 day including today is sitting at 627.05 currently. Why do we keep having varying values for the 100 DMA? I use the one given from StockCharts.com. To see if they made a mistake, I downloaded the historic data from Yahoo on Friday (for kicks I went back the 15 years I have owned AAPL), put it into excel, and calculated my own. It matched the number from stockcharts. Now I didn't look very closely at the numbers. Maybe they adjusted for the dividend, which would then make the calculated values before the dividend lower. That could do it. Has anyone looked into this further. It doesn't matter that much, but seeing a couple different numbers thrown about for the MA's is a little strange. Yes!! I just noticed this too -- drives me crazy when various platforms report different numbers! I think you figured out the mystery though...stockcharts has adjusted prices for the dividend. See the values for April ATH and May low...compare to other platforms.
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JDSoCal
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Post by JDSoCal on Oct 22, 2012 21:03:15 GMT -8
Institutional ownership generally is at the 70% level. Currently it is at 68%. That 2% of collective ownership amounts to about 20,000,000 shares. Sell 20,000,000 shares at $675. Buy back 21,600,000 shares at $625. The institutions pick up a free 1,600,000 shares prior to AAPL going to $1,000, yielding a profit of $1.6 Billion without changing their long term positions, not to mention profits from the judicious purchases of Puts. Today's Put/Call ratio dropped to 0.72:1 from a high of 0.98:1 established on Sept 21, the same day that AAPL peaked at $705.They are doing this because of 2013 expectations of iPhone and iPad market share expansion, and increased profitability of Apple. Very nice summary, insight and comment, Gregg. Yes, congrats on an informative post. And I'm sure Gregg would like to congratulate Team Corvette for winning the manufacturer, team, and driver championships in the GT division of the American Le Mans Series, which ended yesterday. Not bad for one of those unwieldy, boat-like, front-engined cars.
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Post by Deleted on Oct 22, 2012 21:08:29 GMT -8
iPhone ASP - safely over $600. iPod touch - pocket computer, but not a huge volume seller for Apple though an incredibly strategic gateway/iOS hardware/software development platform But yes, I did think about including iPod touch at least. You should include it. It's not a huge seller by apples standards, but its quite probably the 2nd biggest non-phone mobile computing product line globally (after the iPad).
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Post by adamthompson32 on Oct 22, 2012 21:19:02 GMT -8
iPhone ASP - safely over $600. iPod touch - pocket computer, but not a huge volume seller for Apple though an incredibly strategic gateway/iOS hardware/software development platform But yes, I did think about including iPod touch at least. Sure on iPhone. But "consumer iPhone ASP" = $250 or so (not including service costs obviously). It's the least expensive high quality computer on Earth.
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Post by mbeauch on Oct 22, 2012 21:21:40 GMT -8
Not bad for one of those unwieldy, boat-like, front-engined cars. Yes, but tell them where the transmission is located.
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Post by bryanyc on Oct 22, 2012 21:34:30 GMT -8
I went for the Jan 14 750's, straight up, after dumping my margined stock. I spent some time Sunday working up my determination to make the move. I figure that we are in for a big rise in the next half year and I could wait it out and take the suffering if we visited 580. I pulled the trigger around 627 when it seemed the reversal had legs. The volatility drop will kill me after earnings but I think we could get a big move up soon. I will create a spread when we get to $750, if that happens. What kind of spread are you thinking of creating with the 750's? I have some 450-500 Jan '13 spreads that I will hopefully sell this year (49.75 is good enough for me). And I have some 600-650 Jan '14 spreads as well. I would like to make it a 750 - 850 spread if I can put it together at a good price. My cost basis on the 750's is about $54. As I mentioned, if/when we reach the $750 price I would be inclined to lock the spread in.
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JDSoCal
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Aspiring oligarch
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Post by JDSoCal on Oct 22, 2012 21:37:04 GMT -8
Not bad for one of those unwieldy, boat-like, front-engined cars. Yes, but tell them where the transmission is located. Hey, in my Grand Sport, my battery is in the trunk for better weight distribution. Now let's get back above $700 so I can afford that supercharger install!
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jz
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Post by jz on Oct 22, 2012 22:36:54 GMT -8
The biggest issue tomorrow will revolve around price. I think even more so than features or anything else. There are money managers out there who own AAPL and are suggesting that anything without a "2" in front of it will be hugely disappointing. Let's hope this launch goes better than our experience with the last launch. There will be shots taken no matter what so prepare for the fud but I don't care what is said...AAPL will own this space - at every size! Let's just remember that the same pack of geniuses were slamming Apple a while back for not joining the race to the bottom with NetBooks. Money managers should stick to what they do best - losing other people's money, instead of deluding themselves into thinking that they have a clue on how Apple should price its products. Agreed. Just as Apple management has the best information available, (10 times more than anyone else?) upon which to guide on anticipated revenues, etc, they also are in the best position to determine optimal pricing structures to realize different ends. So, I'd argue that whatever price Apple comes out with tomorrow ... that's the best price.
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jz
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Post by jz on Oct 22, 2012 22:43:15 GMT -8
I suspect it's going to be a very turbulent ride all week Not at all. Last week's whipsaw action was the institutions positioning themselves with more shares going into calendar 2013. They accomplished this by starting a sell off at $705 (Sept 21 an important date), with an average sell price of ~$670/$675 before reversing strategy. Average Daily Volume from July Earnings to Sept 21 14.5 million. Average Daily Volume from Sept 21 to date 19.5 million. This caused a lot of margin calls and triggered even more Stop Losses, having the effect of continuing a sell off, and freeing up more shares. It only takes a little bit above daily average to cause a buyer/seller imbalance. A little more supply causes a drop in price. Once started it doesn't take much to keep the momentum going until capitulation occurs. When AAPL tickled $620, a nudge by the institutions caused retail investor capitulation to $609. That set the stage for those very same institutions to load up on AAPL, causing it to go up $25 today. Sold at average of $675, with a buy back at average of $625. Institutional ownership generally is at the 70% level. Currently it is at 68%. That 2% of collective ownership amounts to about 20,000,000 shares. Sell 20,000,000 shares at $675. Buy back 21,600,000 shares at $625. The institutions pick up a free 1,600,000 shares prior to AAPL going to $1,000, yielding a profit of $1.6 Billion without changing their long term positions, not to mention profits from the judicious purchases of Puts. Today's Put/Call ratio dropped to 0.72:1 from a high of 0.98:1 established on Sept 21, the same day that AAPL peaked at $705.They are doing this because of 2013 expectations of iPhone and iPad market share expansion, and increased profitability of Apple. Gregg, I think the more we discuss how the big boys do what they do, the better equipped we will be to anticipate it. Thanks.
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jz
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Post by jz on Oct 22, 2012 23:05:04 GMT -8
"We don't know how to make a $500 computer that's not a piece of junk." - SJ Until the iPad. And the iPad mini tomorrow. Wow, Mav, I've read thousands of your posts and this is one of your best in my mind... Great response in revealing a great accomplishment ... in league with the invention of the pen/paper and Gutenberg's press: Apple is selling sub-$500 computers that are anything but junk with a friendlier-than-ever user interface. If you watch that video of Jobs (about ten years ago) talking about the cloud and tablet (before they had names), it's easy to see that what is unfolding before our eyes is the manifestation of that vision. And now Apple, with products superior to the competition, also enjoys the largest economies of scale and developer community. Slam Dunk. It never ceases to amaze me that AAPL stock can be restrained to the extent that it is; I need to learn this lesson to become a better trader.
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Mav
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Post by Mav on Oct 22, 2012 23:18:51 GMT -8
Huh? I was just being Capt. Obvious. Everyone here knows it - I just felt it was worth pointing out the classic Steve Jobs misdirection, because iPad was most definitely in the planning stages as of the time of that remark (October 2008).
I look forward to the era of iPad mini. Margins could "suffer" a bit, but who cares? Time once was that 30% GM was fantastic. Back then, the thought of 40% GM? Hah! Unthinkable for a "computer company."
Who really needs Apple TV right now? iPad mini will be much more interesting to follow as Apple continues to threaten the existence of the PC. Don't get me wrong, Apple televisions look like a matter of then, but it's kind of like those early cries that iTunes/QuickTime/iPods didn't support the WMA format - nothing Apple ever had to address "or else".
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jz
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"Study the natural order of things and work with it rather than against it." -- Lao Tsu
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Post by jz on Oct 22, 2012 23:31:06 GMT -8
Well, I've had a few beers... just thinking bigger picture (while ironically contemplating smaller screens.) We are moving quickly to a potential future where everyone on the planet has access to everything the human race knows. If, as many historians do, trace the most significant advances in human history to distribution/sharing of experience/knowledge... then future historians will certainly look at our new tools with more reverence than we now ascribe to pen/paper, printing press...
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Post by tofdriver on Oct 23, 2012 0:25:04 GMT -8
Fantastic analysis as always. Where did you find the information for the put/call ratio?
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